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3. The Honourable DRP has failed to consider that as the Appellant is not providing any technical services outside India, there is no question of incurring any expenditure in foreign exchange in providing the technical services outside India and therefore the aforesaid reduction from the export turnover is not called for.
4. The Honourable DRP has failed to consider the jurisdictional Honourable Bengaluru Tribunal decision in the Appellant's own case for the AY 2009-2010 in IT [TP] No. 222/Bang/2014 dated 31.10.2014, wherein the Honourable Tribunal has held that travelling expenses are part of the export turnover and hence cannot be reduced or excluded from the export turnover for computation of deduction under Section 10B of the IT Act.

29. We have considered the rival submissions as well as the relevant material on record. As per the definition of export turnover provided in Expln. 2 below Section 10B(9A), the export turnover does not include IT(TP)A Nos.396 & 435/Bang/2015 freight, telecommunication charges or insurance attributable to the delivery of article or thing or computer software outside India or expenses if any incurred in foreign exchange in providing the technical services outside India. Thus from the plain language of the definition of the export turnover, it is clear that the expenses which are not in the nature of freight, telecommunication charges or insurance attributable to the delivery of article or thing or computer software outside India but expenses incurred in foreign exchange are to be excluded only when the same are incurred for providing technical services outside India. In the case of the assessee, the assessee has claimed that the traveling expenses incurred by the assessee are not for providing the technical services outside India and therefore the same are not required to be excluded from the export turnover. On principle, we do agree with the contention of the learned Authorised Representative that if the expenditure other than the freight, telecommunication charges or insurance attributable to the delivery of article or thing or computer software outside India incurred in foreign exchange not for providing the technical services outside India then the same are not required to be IT(TP)A Nos.396 & 435/Bang/2015 excluded from the export turnover. The Hon'ble jurisdictional High Court in the case of CIT Vs. Motor Industries Co. Ltd. (supra) while dealing with the issue of definition of export turnover has held in paras 17 to 19 as under :

a. Freight b. telecommunication charges c. insurance attributable to the delivery of computer software outside India; d. expenses, if any, incurred in foreign exchange in providing technical services outside India;

19. If the assessee is engaged in the business of providing technical services outside India in connection with the development or production of computer software then expenses if any incurred in foreign exchange in providing technical services outside India is liable to be deducted out of export turnover. The said provision has no application in the case of export out of India of computer software or its transmission from India to a place outside India by any means. The law makes a distinction between technical services rendered in connection with export of computer software and export of technical services for the purpose of development or production of computer IT(TP)A Nos.396 & 435/Bang/2015 software outside India. If the technical services rendered by the assessee's Engineers is in connection with the export of computer software for the purpose of testing, installation and monitoring of software such a turnover do not fall within clause (ii) of subsection (1) of section 80HHE of the Act. Such a turnover falls within sub-clause (i) of subsection (1) of Section 80HHE of the Act, that is export out of India of computer software or its transmission from India to a place outside India by any means. The expenditure incurred in the form of foreign exchange for such services cannot be excluded in computing the export turnover as it forms part of the export turnover. In the instant case as is clear from the order of the Assessing Authority, he proceeds on the assumption that the assessee is a company engaged in rendering technical services outside India in connection with production of said software. Therefore the expenditure incurred in foreign exchange in providing such technical services outside India of Rs.62.7 lakhs was excluded in computing the export turnover and total turnover for arriving at deduction under Section 80HHE of the Act. The assessee is engaged in the business of export out of India of computer software and its transmission to places from India outside India. Before a computer software is exported, the Software Engineers of the assessee would have initial discussion with regard to the requirements, specifications etc. Thereafter computer software is manufactured and then it is transmitted from India to a place outside India. The software Engineers deputed abroad who among other things have to do testing, installation and monitoring of software supplied to the client. Though the said services are technical in nature it does not fall within clause (ii) of sub-section (1) of section 80HHE of the Act of providing technical services outside India in connection with the development or production of computer software. It falls under sub-clause (i) of sub- section (1) of Section 80HHE of the Act. Therefore, the said expenditure cannot be excluded in computing export turn over. In that view of the matter we do not see any merit in this appeal. Accordingly, the said question of law is answered in favour of the assessee and against the revenue. Ordered accordingly."